How (and why) to easily calculate your overall equipment efficiency

Continually monitor your OEE by updating a few numbers.

By Glyn Thorman, Houston Consulting Group

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Overall equipment efficiency (OEE) has long been understood as a key metric to measure not only how well a site is performing, but also how changes made at a plant may be having a desired effect. Much like a football scoreboard though, OEE only reports on the present performance. It cannot move the ball, intercept a pass, or score a touchdown. But it can simply and accurately present a documented picture of equipment and plant efficiency.

The numbers contained in an OEE score can be used to compare similar equipment, sister plants, or even entire industries. When you know your numbers, you know your opportunities.

This article is meant to assist the reader in understanding the components of OEE, why you need to know these measurements, and also how to calculate the measurement readily at your own site.

You also can access a free-to-use OEE spreadsheet by clicking bit.ly/HCGOEE. The template requires a few numbers updated to continually monitor your OEE performance.

The elements of OEE

Let’s start with your car as an example. A perfect car could run all day, at maximum factory speed of say, 100 mph, and never have to stop. It doesn’t get lost or take a wrong road. During the day, the car has no time-losses from maintenance and needs no extra fuel. Because it is constantly running, there is no loss of availability. The rate is consistent, with no rate reductions caused by slowing for corners or traffic lights. And, the car never gets lost or is forced to redo a portion of the trip to get back on the right road. It’s 100% efficient – the perfect car.

OEE is a metric that estimates the ability of a machine or other plant asset to be always up and available, running at nameplate capacity and producing no off-spec material. Factors such as scheduled or unscheduled maintenance, rate reductions, and start-up quality issues can have a negative impact on the desired potential. This is where OEE shines: it tells you where to look for improvement opportunities, what your goals could/should be and how you stack up against the competition – internal or external. With this information you can focus on where to implement maintenance improvements, reduce bottlenecks, make schedule adjustments, or even modify your perceived required scheduled downtime.

In short, similar to the football scoreboard, OEE tells you how you’re doing – it captures all your improvement opportunities that have a major impact on your financial well-being. And if improvements don’t show up on OEE, then maybe the improvements are having minimal impact on your overall plant revenue.

The three primary components to OEE are Availability, Rate, Quality, and each is worth a closer look. Plus, we’ll take a look at the controversial Idle Time subject.

Availability

Availability can be defined as the degree (percentage) to which a unit or machine is continually operating during a prescribed time. Unscheduled downtime such as corrective maintenance, or scheduled downtime events such as grade changes or preventive maintenance, are detractors from Availability. Unscheduled events are considered avoidable, but why are scheduled events considered unavoidable? The answer is, does everyone in your industry perform these scheduled actions and to the same degree?

When you discount an action, you lose the opportunity to improve it. For the example in this article, Potential Run Time is calculated as Total Available Time less Idle Time. This is the potential time available with no discounts for scheduled or unscheduled events. Anything less is lost Availability.

But why is there a penalty for scheduled events? Good question, if your customers excuse you for any of those events and willingly pay a higher cost. Or, if your competitors say they appreciate your difficulty and won’t steal your business. Whenever you excuse lost Availability other than for Idle Time, you’re taking an opportunity for improvement off the table. I believe Actual Run Time should pursue Potential Run Time as a goal.

Idle time and availability?

This component can be controversial. Some plants consider all or part of Idle Time as a negative for Availability. For example, economic demand, lack of feedstock, or administrative decisions that do not require the machine to be in production are cited as reasons for negative Idle Time. But the point must be raised – if the machine is in a not needed condition, why penalize Availability? Rather, Idle Time should correctly be discounted from Potential Run Time and from Net Maximum Production, and not negatively impact OEE calculations.

However, I recommend you track and strive to improve the amount of time a machine is idled by following the calculator results shown in the spreadsheet in Figure 1. Idle Time percentage is a beneficial metric for tracking/reducing underused equipment, but in my opinion, is not part of the OEE metric.

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  • Glyn - I find it interesting that you seem to contradict yourselves by stating that planned maintenance activities and changeovers should have negative impact to the Availability component, yet you make exception by throwing in Idle Time where the examples that you give range from not having raw materials (unplanned) to administrative decision (planned). One could argue that planned maintenance activity is an admistrative/management decision. This just brings to light that the OEE calculation itself is not difficult. Its simple math. The complicated part is making sure that everyone is agreement on the definitions behind the "bucketing" and exceptions that make up the 3 components. This is especially important within an organization so that everyone is comparing apples to apples.

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  • Thanks Joe for the comment. I think a clarification would be, "Is Idle Time a reflection of the machine not being able to functionally run, not running at speed or not making quality?" The answer is no. Idle Time is an important separate metric and included in our spreadsheet. But it is not used as an OEE metric component that negatively impacts availability. It is captured but factored out of OEE. On your last point, I totally agree. There has to be a well-defined inclusion/exclusion of factors and a definite apple/apple relation within and across plant(s).

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